UK Tax Questions? Ask a UK Tax Advisor for answers ASAP
Thanks for your question. Please kindly RATE my answer when you are satisfied
When was the property purchased please - 2003?
I believe it was on the 29th April 2003
Thanks. Do you know own another property?
Thanks. My apologies for the slight delay in reverting to you. I have just had to take a phone call briefly...
That's ok, I thought you had forgotten me
Do you live in your other property as your main residence? Are you able to move back into your original property even for a relatively short time before you sold that property?
yes the other property is our main residence, and how long does the short time need to be as it is possible
There is no statutory time period that is prescribed. You need to show that it is genuinely your main residence for a period of time - this need not be more than a month or so. To demonstrate main residence you need to demonstrate that you genuinely live there most of the time for that period. However yo may not need to rely on this based on the figures you quote.
Is the property owned in your sole name or with a partner/spouse?
if I did not move back in what would the tax liability be. the property is in sole name
Do you have a spouse or long term partner you trust?
thank you. In order to calculate your gain, you need to add up the total number of years you have owned the property and divide the gain by that number of years. . This gives you your yearly gain.
from that figure, you can deduct those years in which you were resident in the property, and, if you are prepared to move back into the property prior to selling the same, you can deduct the three years prior to the point you move back in as well.
from this figure, you can further deduct your annual unused allowance of £10,900 and private lettings relief. The maximum amount of Letting Relief due is the lower of:
If you are married you can in addition consider making a transfer of half the property into your joint names prior to a sale in order to benefit from two allowances of £10,900 rather than just one.
Is there anything above I can clarify for you?
A bit confused. I have worked out that I had the property for 10 years so that would be an yearly gain of £ 5500.00. So how do I deduct the years in which I was a resident and what would the end figure be?
I will work out a calculation for you if you just bear with me for a moment...
Calculation as follows not including any of the fees you can deduct in terms of acquisition nor sale:Gain after applying annual exempt amount of 10900 is 44100Remaining annual exempt amount is 0Gain after applying losses brought forward of 0 is 44100Divide by 11 years = 4009Discount 8 years = 3207212028 Taxable at 28% = 33670 Taxable at 18% = 0Total = 3367
Based on what you say you should be able to apply private lettings relief to the period you let the property which should assist in offsetting the tax due on that period which may allow you to reduce your CGT gain to zero without the need to move back into the property nor transfer into your spouses name.
Many thanks Josh
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